Trane Technologies plc (TT)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 81.02% | 81.96% | 82.89% | 81.50% | 9.50% |
| Operating profit margin | 17.66% | 16.61% | 15.36% | 14.56% | 12.57% |
| Pretax margin | 16.13% | 14.48% | 13.54% | 12.65% | 9.44% |
| Net profit margin | 12.96% | 11.62% | 11.15% | 10.25% | 7.01% |
Trane Technologies plc has shown a significant improvement in its profitability ratios over the years.
- The gross profit margin has increased steadily from 9.50% in 2020 to 81.02% in 2024, indicating the company's ability to efficiently manage its production costs and generate more profit from its sales.
- The operating profit margin has shown a similar positive trend, rising from 12.57% in 2020 to 17.66% in 2024. This demonstrates Trane's effectiveness in controlling its operating expenses and increasing profitability at the operating level.
- The pretax margin has also witnessed a consistent uptrend, climbing from 9.44% in 2020 to 16.13% in 2024. This reflects the company's ability to generate more income before accounting for taxes, which is a key indicator of overall financial performance.
- The net profit margin, which represents the bottom line profitability after all expenses including taxes, has shown a notable improvement from 7.01% in 2020 to 12.96% in 2024. This indicates that Trane Technologies plc has been able to enhance its efficiency in managing costs and generating profits for its shareholders.
Overall, the increasing trend in all profitability ratios suggests that Trane Technologies plc has been successful in enhancing its operational efficiency and financial performance over the years.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 17.37% | 14.92% | 13.38% | 11.20% | 8.44% |
| Return on assets (ROA) | 12.75% | 10.44% | 9.71% | 7.88% | 4.71% |
| Return on total capital | 29.16% | 25.12% | 23.85% | 18.52% | 12.84% |
| Return on equity (ROE) | 34.43% | 28.93% | 28.85% | 22.75% | 13.34% |
Trane Technologies plc's profitability ratios have shown a consistently positive trend over the past five years.
- Operating return on assets (Operating ROA) has increased steadily from 8.44% in December 2020 to 17.37% in December 2024. This indicates that the company's operating activities are becoming more efficient in generating profit from its assets.
- Return on assets (ROA) has also shown a positive trend, rising from 4.71% in December 2020 to 12.75% in December 2024. This metric evaluates how effectively the company is utilizing its assets to generate profits.
- Return on total capital has exhibited a similar increasing trend, starting at 12.84% in December 2020 and reaching 29.16% in December 2024. This ratio indicates the return the company is generating for both debt and equity investors.
- Return on equity (ROE) has shown strong growth as well, climbing from 13.34% in December 2020 to 34.43% in December 2024. This metric measures the profitability of the company for its shareholders' investment.
Overall, Trane Technologies plc's profitability ratios reflect improving financial performance and efficiency in utilizing its assets and capital to generate returns for both investors and the company itself.